The U.S. Securities and Exchange Commission has approved several spot Bitcoin ETFs in a historic move that creates a monetary pipeline between Wall Street and the king of cryptocurrency.
The announcement comes amid a volatile day for BTC, which is trading at $45,937 at time of publishing, down 0.9% in the last 24 hours.
The SEC’s move marks the end of a years-long push to legitimize Bitcoin in America and create a safe, secure and regulatory compliant way for investors with large amounts of capital to gain exposure to BTC.
The SEC has approved all eleven spot Bitcoin ETFs that were under consideration, including BlackRock, Fidelity, Grayscale, VanEck, Bitwise, Franklin, Valkyrie, Hashdex, Ark Invest, WisdomTree and Invesco Galaxy.
Exchange-traded funds track the performance of a particular asset or group of assets and are traded on the stock market, and all of the approved spot Bitcoin ETFs require fund managers to hold physical BTC.
Once the EFTs are live, which is likely imminent, investors will be able to easily buy shares to gain exposure to Bitcoin’s price movements without having to worry about buying Bitcoin directly.
Bitcoin ETF applicants worked with the SEC for months to refine their proposals.
Late last month, the applicants essentially caved to the SEC’s demand to make their ETFs utilize cash creations and redemptions.
Cash redemptions require the fund manager to sell physical Bitcoin in order to distribute cash to shareholders, creating taxable transactions.
The SEC rejected spot Bitcoin ETF applications for years while approving Bitcoin futures ETFs that are relatively similar in structure.
But that backfired in August, when the D.C. Circuit Court of Appeals ruled the SEC behaved in an “arbitrary and capricious” fashion when it rejected Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF.
The court said that federal agencies must treat “like cases alike,” a ruling that paved the way for today’s approvals.
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